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Daily Market Update March 2, 2020

Early Morning Update

The Apr20 natural gas contract is trading up $0.03 at $1.71.  The Apr20 crude oil contract is up $0.74 at $45.50.

  

Summary

Winter took a real breath over the weekend, with overnight lows in the low to mid 20s across the eastern U.S., but a highly anticipated strong warm-up is expected for the next week. Large eastern metro areas will see high temperatures in the low 60s this week – significantly above-average for the first half of March. NYMEX reacted quickly, with the March prompt starting last week at $1.905 and expiring Wednesday at $1.821. The market continues to watch how these above-average temperatures will impact the end-of-winter storage levels. Market estimates are building consensus around 1.82 Tcf, which is 10% higher than the 5YA. Beyond weather, there are quite a few macro questions with the market right now with global implications: Will low oil prices, down 15% week-over-week, reduce production and put producers at risk of bankruptcy? How will the markets react to the first coronavirus deaths in the U.S.? Will the stock rout continue into a second week? If the coronavirus continues to spread aggressively across the globe, will it lead to a global recession? The market continues to look for answers to these questions and  will begin to price these potential answers into future prices – the question becomes: higher or lower?

Market Update030220

Market Settles 022820

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